China's consumer electronics market declined in 2013 as demand for products like TVs and digital still cameras decelerated, compelling the country's makers to devise new strategies for growth, according to IHS.
　　Combined unit shipments for the chief products comprising the overall China consumer electronics industry fell in 2013 to 710.2 million units, down 9% from 781 million in 2012.
　　"2013 was the third straight year of declining shipments and the second consecutive year of revenue contraction for the China consumer electronics space," said Horse Liu, principal analyst for the connected home at IHS. "The cessation of government subsidies for consumer electronics products played a major role in the annual decline."
　　But while shipments will continue to decelerate during the next few years, revenues will continue to be strong. This is because of surging shipments in white goods such as air conditioners and refrigerators. The vigorous white-goods market, in turn, will make up for distressed device segments like digital still cameras and portable media players.
　　Total shipments for the major device categories in 2014 will amount to a projected 674.2 million units. Meanwhile, revenues are forecast to reach US$104.8 billion, up from US$99 billion in 2013 and US$98.1 billion in 2012, said IHS.
　　China makers adjust strategies
　　The market for traditional consumer electronics products is maturing in China, much as it is throughout the world. And with the government continuing to push for urbanization and progress coming to the countryside, Chinese OEMs are retooling their growth strategies to keep up with the changing dynamics of domestic demand.
　　For several years the country's consumer electronics market had relied on subsidies from Beijing to help stimulate demand, encouraging the populace to buy new appliances like TVs. Those subsidies, which ended in May 2013, were primarily targeted at the rural and low-end markets – also the focus of production among China-based OEMs.
　　Today, makers are adopting a new approach, aggressively developing high-end products to appeal instead to urban consumers with the purchasing power to buoy the domestic consumer electronics industry.
　　"China makers are investing more resources on high-end products carrying expensive prices in order to push up sales revenue, but they must also be careful to adjust production capacity to reduce the risks of overproduction," Liu added.
　　Among China OEMs, export-oriented players faced distinct challenges in 2013. An appreciating China currency drove production costs higher, and caution from international buyers led to smaller purchase orders that dented domestic profitability, added IHS.
　　Winners are few, losers plenty
　　The consumer electronics segments in China that enjoyed shipment gains in 2013 compared to 2012 included LCD TVs, air conditioners, microwave ovens and refrigerators. These markets, along with washing machines, will continue to perform well in 2014.
　　Against this circle of winners was a small group of underperforming segments, plus a larger group of markets that have bled red for many years now.
　　In the first category were segments like set-top boxes (STBs), which slipped 9% in shipments to approximately 135 million units.
　　These soft segments, however, are forecast to recover in shipments in 2014 as makers improve their products and upsell new features to consumers. For instance, China-based STB makers will succeed in locating new export markets, IHS believes.
　　A second category of trailing segments in 2013 consisted of devices that have been losing steam for years. These included DVD players, portable music players and digital still cameras. For such devices their peak year of shipments lay long in the past, and no end to their decline is in sight.
　　Shipments of digital still cameras in China by 2017, for example, will have lost 75% of their volume compared to 2009; while personal media players during the same period will be down a debilitating 92%.
　　Dedicated devices on the whole have lost market share to multipurpose equipment like mobile handsets, which have co-opted their functions and are now preferred by consumers for versatility and popular appeal, noted IHS.